Wednesday, October 21, 1998

Kissing Your Broker Goodbye (Part Deux)
by Michael Giudicissi ([email protected])

Can you hear it Fools?

A revolution has started. They unwashed masses have begun a revolt, and it's aimed squarely at us Fools. Should you have had the opportunity to read my last Fribble you would have supreme insight into my feelings on full-service brokers. I received dozens of emailed comments -- most from fellow Fools jumping on the "say bye-bye to broker bandwagon." Some were from fools (small cap intended) looking for stock picks.

And then there were some from the object of my lighthearted scorn, the full-service brokers. Is not Foolishness about the contrary point of view? Well then, let us let the Broker Boys have their say!

First though, let us set the record straight: Are there good full-service brokers who consistently average good returns for their customers? Yes. Absolutely there are.

Are all brokers out to trade their customers in and out of investment vehicles simply to add to the size of their wallets? No, of course not.

Are the majority of brokers first concerned with the welfare of their clients portfolios, giving no thought to their own commissions? Boy! It got awfully quiet in here. (I just dropped a pin, anyone hear it?)

In any event, one of the responses to my Foolish bit of frivolity accused me of being a "problem client" that my former full service broker should be happy to get rid of. I'm quite sure that old Cornelius (an alias of course) wouldn't be happy at losing any accounts, especially mine since I was the primary recipient of the "load 'em up and returns be damned funds" that he was so adept at peddling. When I called to tell my broker I was closing my account, all I heard were his soft whispers of, "You'll be back, you'll be back." (I'm not kidding, Fools. Imagine someone with a bigger ego than me! Call Mr. Guiness. Quickly!)

The same respondent also (correctly) noted that full-service firms provide estate planning, tax information, etc. If you need these services go ahead! Pay someone to provide them for you. There is nothing wrong with paying for a job well done.

My new full-service buddy (a Fool in the making perhaps?) was a bit put off by the fact that we use humor here at the Fool to educate. Come now, learning something that could change your life, and having some laughs in the process, how could that possibly be wrong? I say that BrokerMan had his MBA wrapped a little too tightly.

To sum up this little story, I have taken a new twist on the old saying: He who retires with the best returns (and lowest commissions) wins! Better yet: He (or she) who retires with the best returns (lowest commissions), lives comfortably, educates and invests for his (or her) children and grandchildren, not only wins but becomes known as a really swell guy (or gal)!

Do you need a full service broker for that? Maybe. Only you can decide. If not, we'll see you here at the Fool.

Fool On!

[Hey Fools, why not pen a Fribble, yourself? We welcome submissions from readers. Just click here and read the "What's a Fribble?" item, pen a short masterpiece, and send it off to TMF [email protected].]

Have a similar tale?
Talk about it in the Fribble Message Folder!